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7 Things to Know About Medicare for 2021

7 Things to Know About Medicare for 2021

As we begin 2021, the Centers for Medicare and Medicaid Services (CMS) has released a variety of information healthcare providers need to know about billing Medicare in the new year. We’ve created a short list of the top seven things providers should know.

Medicare Fee Schedule

In December, CMS released the 2021 Medicare Physician Fee Schedule. For a detailed look at some of the provisions that were part of that final rule, check out our blog post, “2021 Medicare Physician Fee Schedule: What You Need to Know.” For a data source of the updated fees for Indiana and Michigan, visit WPS GHA’s webpage of downloadable fee schedules.  A zipped file of updated fees for all states is available on the CMS Physician Fee Schedule webpage. (NOTE: Because of last minute changes to the 2021 Medicare Physician Fee Schedule in the recent COVID-19 relief package, those fee schedules may not yet be available.) 

Medicare Part B Premiums

The standard monthly premium for Medicare Part B enrollees will be $148.50 in 2021, an increase of $3.90 from $144.60 in 2020. Recent legislation signed by President Trump significantly dampens the 2021 Medicare Part B premium increase that would have occurred given the estimated growth in Medicare spending next year. Medicare spending is estimated to grow due to people seeking care they may have delayed during the COVID-19 public health emergency, availability of more COVID-19 treatments, and availability of COVID-19 vaccines (for which CMS recently announced that there would be no out-of-pocket costs for seniors).

The standard monthly premium for 2021 Medicare Part B will increase from the 2020 rate of $144.60 to $148.50. According to CMS, the $3.90 increase would have been more if not for Congressional action which “dampens the 2021 Medicare Part B premium increase that would have occurred given the estimated growth in Medicare spending next year.” 

“Medicare spending is estimated to grow due to people seeking care they may have delayed during the COVID-19 public health emergency, availability of more COVID-19 treatments, and availability of COVID-19 vaccines (for which CMS recently announced that there would be no out-of-pocket costs for seniors),” the agency said in a recent fact sheet. 

The increases also result from a 1.3 percent cost-of-living adjustment (COLA) announced by the Social Security Administration, which also implements a “hold harmless” provision for Medicare Part B premium increases. In other words, beneficiaries whose COLA to their social security benefit is not enough to cover the increase in the Medicare premium will pay less than the $144.60.

About 7 percent of Medicare beneficiaries pay increased premiums based on a sliding scale of incomes greater than $87,000 per year for beneficiaries who file individual tax returns, or greater than $174,000 for joint filers. Depending on their modified adjusted gross income, beneficiaries might pay as much as $504.90 in monthly premiums in 2021.

These premiums do not apply to Medicare Advantage or prescription drug plans, whose premiums are determined separately.

Medicare Part B Deductible

CMS also announced that the annual deductible for all Medicare Part B beneficiaries will be $203 in 2021 (compared to $198 in 2020), and increase of $5. This deductible does not apply to Medicare Advantage or prescription drug plans, whose deductibles are determined separately.

Medicare Part A Premiums

About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment. Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $259 in 2021, a $7 increase from 2020. 

Certain uninsured aged individuals who have less than 30 quarters of coverage and certain individuals with disabilities who have exhausted other entitlement will pay the full premium, which will be $471 a month in 2021, a $13 increase from 2020.

These premium amounts also do not apply to Medicare Advantage or prescription drug plans.

Medicare Part A Deductible/Coinsurance

The Medicare Part A inpatient hospital deductible for beneficiaries admitted to the hospital will be $1,484 in 2021, up $76 from 2020, which covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. For days 61-90, Medicare beneficiaries will pay a coinsurance amount of $371 per day in a benefit period, and $742 per day for lifetime reserve days. 

For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $185.50 in 2021.

These deductibles and coinsurances also do not apply to Medicare Advantage or prescription drug plans.

Medicare Sequestration

The Budget Control Act of 2011 required mandatory across-the-board reductions in

Federal spending, also known as sequestration. The American Taxpayer Relief Act of 2012 postponed sequestration for 2 months, but as required by law, President Obama issued a sequestration order on March 1, 2013, that all Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013, would incur a 2 percent reduction in Medicare payment. 

Sequestration has been ongoing since that time, but as part of the COVID-19 Cares Act in March 2020, Congress temporarily suspended the Medicare sequestration through December 31, 2020. The more recent COVID-19 relief package passed by Congress in December 2020 continued the temporary suspension of the 2 percent Medicare sequestration for another 3 months, through March 31, 2020.

MIPS

As the Merit-Based Incentive Payment System (MIPS) enters its fifth year, eligible providers should plan to continue (or begin) to participate. Not participating in the program in 2021 or failure to meet certain program standards could result in a -9 percent payment adjustment of covered professional services paid under or based on the Medicare Physician Fee Schedule in 2023.

For 2021, providers also have to achieve a threshold of 50 points to be eligible for an incentive payment, up from 45 points in 2020. And performance categories will be weighted as follows for individual MIPS eligible clinicians, groups, and virtual groups reporting traditional MIPS. These values represent slight changes from 2020 (as noted below):

  • Quality = 40% (down 5% from 2020)
  • Cost = 20% (up 5% from 2020)
  • Promoting Interoperability = 25%
  • Improvement Activities = 15%

Providers can check their eligibility for MIPS in 2021 or earlier years by visiting CMS’s Quality Payment Program Participation Status page.

Also, CMS has extended the deadline for COVID-19-related 2020 MIPS Extreme and Uncontrollable Circumstances Exception applications to February 1, 2021. Any data submitted for an individual, group, or virtual group (before or after an application has been approved) will be scored. Data submission for an APM Entity won’t override performance category reweighting from an approved application.

Other key MIPS deadlines include:

  • January 4, 2021 – 2020 MIPS performance year data submission window opens.
  • March 1, 2021 – Deadline for CMS to receive 2020 claims for the Quality performance category. Claims must be received by CMS within 60 days of the end of the performance period. Deadline dates vary to submit claims to the MACs. Check with the MACs for more specific instructions.                                                                                
  • March 31, 2021 – 2020 MIPS performance year data submission window closes.

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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